21 Jul UK Financial Services Fines: Barclays and Monzo Face Hefty Penalties for AML Failures

“UK Financial Services Fines” have surged recently, highlighting the Financial Conduct Authority’s relentless crackdown on weak anti‑money laundering (AML) systems. Two high-profile cases—Barclays and Monzo—stand out for exposing serious lapses in conducting customer due diligence, onboarding, and transaction monitoring. These firms now form key examples within the evolving regulatory enforcement landscape.

Barclays Fined £42 Million for AML Failings

Barclays Bank UK PLC and Barclays Bank PLC were collectively fined £42 million by the FCA in July 2025. The penalty stems from two separate AML breaches:

Stunt & Co Relationship

Between 2015 and 2016, Barclays maintained banking services for Stunt & Co, a bullion trading firm linked to James Stunt. The firm received £46.8 million from Fowler Oldfield, later identified as a central actor in a £266 million laundering scheme. Barclays failed to gather sufficient due diligence, ignored law enforcement warnings, and only reviewed the risk exposure in 2021—after other institutions had been penalised. The FCA fined Barclays £39.3 million for these failings.

Account for WealthTek

Barclays opened an account for WealthTek, which lacked FCA authorisation to hold client funds. Despite a simple check of the financial services register, the bank allowed around £34 million in client money. Barclays agreed to a voluntary £6.3 million repayment to clients. The FCA imposed a £3.1 million fine following early settlement concessions.

Therese Chambers, FCA joint executive director of enforcement, emphasised that such lapses allow criminals to launder money and various fraud to occur. Barclays cooperated extensively, which contributed to a substantial discount from the initial proposed fine.

Monzo Penalised £21.1 Million for Systemic AML Failings

Monzo Bank received a £21,091,300 fine from the FCA in July 2025 for widespread anti‑financial crime failures between October 2018 and August 2020.

Lapses During Rapid Expansion

Monzo’s customer base grew nearly tenfold, from around 600,000 in 2018 to over 5.8 million in 2022. Its AML controls did not scale accordingly. The FCA found systemic weaknesses in onboarding, risk‑rating, and transaction monitoring, triggering an independent review in August 2020.

Implausible Addresses and Ignored Ban on High‑Risk Accounts

Applicant addresses included Buckingham Palace, 10 Downing Street, and even Monzo’s own HQ. These implausible details revealed profound deficiencies in verification processes. From August 2020 to June 2022, Monzo breached a regulatory requirement that banned it from opening accounts for high‑risk customers, rolling out over 34,000 such accounts regardless.

The initial fine of £30.13 million was reduced by 30% due to cooperation, leaving the final £21.1 million penalty. FCA’s Chambers noted the firm’s failure to meet both public expectations and regulatory obligations during that period.

Wider Picture of UK Financial Services Fines

Enforcement Trends in 2024–25

FCA fines reached a record £176 million in 2024, more than triple the level the year before. Most sanctions involved weak governance and ineffectual financial crime systems. Notable offenders included Starling (£28.9m), Metro Bank (£16.6m), Citigroup (£27.7m), and HSBC group (£6.2m)

By mid‑2025, the FCA had issued more than £33.4 million in fines across various sectors—with Monzo’s penalty alone comprising over two-thirds of that total for retail banking failures.

Patterns for the Financial Services Sector

Both Barclays and Monzo illustrate repeated themes:

• Firms failing to scale compliance controls in line with business growth.
• Reliance on assumptions rather than verifying client legitimacy.
• Failure to react to law enforcement alerts or comply with regulatory restrictions.
• Delayed review of high-risk customers, even when red flags were clear.

These incidents underline why firms must continuously test and refine AML frameworks—even after rapid expansion.

How Firms Should Respond to AML Enforcement

Invest in Scalable Systems: Automated onboarding checks, dynamic client risk scoring, and proactive transaction monitoring must evolve alongside business volumes.

Build Responsive Governance: Define clear ownership of AML risks within senior teams. Ensure timely escalation when issues emerge and maintain internal audits of onboarding changes or policy upgrades.

Emphasise Early Visibility & Remediation: Both Barclays and Monzo benefited from reducing penalties through proactive cooperation and restitution schemes. Firms should document corrective actions and engage regulators early when concerns surface.

Prioritise Staff Training: Frontline staff must identify red flags such as mismatched or reused addresses and escalate accordingly. In Monzo’s case, applicants using Buckingham Palace as a home address should have triggered immediate review.

The State of UK Financial Services Fines

Recent actions against Barclays and Monzo demonstrate that AML shortcomings remain a key focus of UK Financial Services Fines, with regulators targeting both traditional banks and challenger institutions. Historical weaknesses, poor onboarding, and failure to act on regulation can still lead to contemporary enforcement.

These cases stress that scaling without simultaneous compliance investment is a recipe for regulatory penalties—and reputational damage.

At KYC Lookup, we are fully accredited as an AML Training Provider with online courses that can help to improve your staff AML knowledge. Contact us today for more information.